AMD stock whipsaws as Wall Street balances better than anticipated Q1 results with AI uncertainty
But analysts were torn on AMD's path forward, with Bank of America upgrading the company to a Buy and others like Jefferies lowering their price target on the firm on concerns about AI growth for the year.
Shares of AMD jumped as much as 4.9% at the start of trading on Wednesday before paring gains and dropping back to below 1%.
For the quarter, the AI chipmaker and Nvidia rival saw adjusted earnings per share (EPS) of $0.96 on revenue of $7.4 billion, ahead of analysts' expectations of $0.94 on revenue of $7.1 billion, based on Bloomberg consensus estimates. The company reported EPS of $0.62 and revenue of $5.4 billion in the same quarter last year.
The company also said it anticipates Q2 revenue of between $7.1 billion and $7.7 billion. Analysts were anticipating $7.2 billion.
Analyst Vivek Arya cited AMD's "strong" sales outlook for the second quarter "despite China headwinds." Arya raised his price target on AMD shares to $120, while shares traded around the $100 level Wednesday morning.
In April, AMD, like Nvidia (NVDA), announced that the Trump administration instituted tighter export controls on AI chips destined for China. The move effectively cuts off AMD's ability to ship its MI308 AI processor to the region, and, according to the company, might result in as much as an $800 million charge on inventory, purchase commitments, and related reserves.
AI chip companies are also staring down the government's AI diffusion rules, which would require certain countries to acquire special licenses to gain access to a limited number of US AI chips.
'Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025,' AMD CEO Lisa Su said in a statement.
Lisa Su, chairwoman and CEO of Advanced Micro Devices (AMD), delivers the opening keynote speech at Computex 2024, Taiwan's premier tech expo, in Taipei on June 3, 2024. (Photo by I-Hwa CHENG / AFP) (Photo by I-HWA CHENG/AFP via Getty Images)
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I-HWA CHENG via Getty Images
AMD's earnings results follow rival Intel's (INTC) report, which saw the company beat on the top and bottom lines but issue lighter-than-anticipated revenue guidance in the second quarter. At the time, Intel CFO David Zinsner blamed the 'current macro environment' for creating 'elevated uncertainty across the industry.'
Nvidia (NVDA) will report its earnings on May 28.
AMD's Data Center segment revenue topped $3.7 billion, versus expectations of $3.6 billion. The segment generated $2.3 billion in Q1 last year.
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